The fourth tranche of the government’s sovereign gold bond scheme will open from July 18-22,2016

The fourth tranche of the government’s sovereign gold bond scheme will open from July 18-22,2016

The allotment date is set for August 5,2016

Sovereign gold bonds (SGBs) are government securities denominated in grams of gold. 

They are substitutes for holding physical gold where the issue and redemption is carried out in cash but indexed to the value of the underlying gold. 

The bond is issued by theReserve Bank on behalf of the Government of India. 

In the new tranche, the government is likely to lower the minimum investment in SGBs to 1gm from the current floor of 2 gm.

Since this is the first tranche of the FY17 fiscal, a new maximum annual limit of 500 gm applies to investors.

However, the government is likely to revisit this investment cap – either raise it or do away with it altogether – depending on the response

The Reserve Bank of India on Friday  July 15,2016 said the issue price of Series I of the Sovereign Gold Bond 2016-17 has been fixed at ₹3,119 a gram of gold.

The rate has been fixed on the basis of simple average of closing price of gold of 999 purity for the week July 11 to 15, as published by the India Bullion and Jewellers Association. Series I of the Sovereign Gold Bond 2016-17 will be open for subscription from July 18 to 22,2016

Note

In the first three tranches of gold bonds issued during the financial year 2015-16, about 4.50 lakh investors purchased total bonds equivalent to 4,908 kg, amounting to about Rs. 1,320 crore.